The Hon. Mr Mkhuleko Hlengwa MP
Inkatha Freedom Party
Albert Einstein famously asserted that “Insanity is doing the same thing over and over again and expecting different results.”
Insanity has surely reared its ugly head again with South African Airways receiving yet another taxpayer-sponsored Government bailout, with the strict condition that a “business as usual” approach will be employed for the struggling airline, despite ongoing challenges ranging from service deficiencies to financial difficulties.
The inescapable reality is that SAA has been in “business unusual” mode for several years. For the last two years, it has failed to present financial statements.
In the absence of good governance, financially sound business decisions, and consequences for failure, the culture of unaccountability continues to thrive. It is certainly not “business as usual” when Cabinet reappoints a failed Board Chairperson.
Ms Dudu Myeni was initially appointed on the expectation that she would improve the situation at SAA. But the opposite has happened. SAA has lurched from one scandal to another, from failure to failure. Yet Ms Myeni was rewarded with reappointment. That is “business unusual” and it cannot continue.
A comprehensive business turnaround strategy is required to get SAA operating like any other business. We must go back to the business standards where failure is punished, where financial statements are submitted on time within the prescribed framework, and where business decisions take precedence over political expedience.
The one-trick pony of bailouts and guarantees is tired, and it gives rise to a lack of accountability and a lack of consequences.
The taxpayers’ pocket is not bottomless, and the time has come for the taxpayer to get value for money out of SAA.
Unprofitable and unsustainable routes need to be discontinued. Strategic income-generating partnerships must be pursued with other airlines.
At some point we will have to bite the bullet and appreciate in good business faith that if SAA continues on its unsustainable, money-losing trajectory, we will have to privatise. We must act in the national interest.
The risk being assumed by the taxpayer through the granting of this going-concern guarantee is of epic proportions. The total guarantee liability now stands at R20 billion. This guarantee cannot be revoked should the Board be unable or unwilling to fulfil the prescribed conditions, or even if the Board fails to fully re-route SAA onto a sound and sustainable trajectory of growth and profit.
Hindsight being the best sight, and experience being the best teacher, one would expect Ms Myeni to shy away from being a rogue, runaway, one-man show. Yet she is willing to side step the collective at the behest of a phone call from uBaba.
The greatest problem we face is that the financial risk that the taxpayer has assumed will now be overseen by a Chairperson who herself is a risk.
So for us to do the usual things again would give credence to the assertions of Einstein; we would be giving life to insanity.
SAA needs to go back to basics and follow standard business disciplines to get out of this mess.
We cannot continue throwing financial solutions to non-financial problems.
I thank you.
Hon. Mkhuleko Hlengwa, MP,
071 1110 539
IFP Media, Parliament